Employment bond

Employment bond | Daily Tribune

Employers and employees have a mutually dependent relationship. During the hiring process and throughout the course of employment, employees often undergo employer-sponsored training and development programs. These training programs enhance the employees’ capabilities and proficiency, enabling them to perform their duties more efficiently and effectively. In turn, this improvement directly contributes to the employers’ ability to deliver higher quality service to their clients.

This increased proficiency, however, also makes employees more attractive to other employers. Thus, there is a risk that employees, enticed by a higher salary, may transfer employment, leaving the current employer who invested in their training. These training programs, however, are not free — they require a significant investment of time and resources. This raises the question: how can employers ensure a reasonable return on their investment or, at least, recover the costs of training?

To address this issue, employment contracts and training programs often include a “bond” clause. Under this clause, the employee agrees to remain with the employer for a specified minimum period. If the employee resigns or is terminated within this period, they are obligated to reimburse the employer for the training expenses incurred. In cases where an employee resigns prematurely, where should the employer seek recourse? Should it approach the regular civil courts or the labor tribunals?

This question was categorically addressed in the case of Comscentre Phils. Inc. vs Rocio.

Comscentre argued that the NLRC had jurisdiction over the enforcement of the employment bond against Rocio as it was covered by their terms and conditions of employment. On the other hand, Rocio argued that the NLRC did not have jurisdiction as the claim for payment of an employment bond had nothing to do with wages and other terms and conditions of employment. It was an action for breach of contractual obligation which is a civil dispute under the jurisdiction of regular courts, not the NLRC.

In ruling in favor of Comscentre, the Supreme Court said that Article 224 of the Labor Code cloaks the labor tribunals with original and exclusive jurisdiction over claims for damages arising from the employer-employee relationship. Citing Bañez vs Valdevilla (Bañez), it emphasized that the jurisdiction of labor tribunals is comprehensive enough to include claims for all forms of damages “arising from the employer-employee relationship.”

Additionally, citing Supra Multi-Services Inc. et al. vs Labitigan, the Court held that the law should also apply with equal force to an employer’s claim for damages against its dismissed employee, provided that the claim arises from or is necessarily connected with the fact of termination and should be entered as a counterclaim in the illegal dismissal case. It maintained, however, that the reasonable causal connection with the employer-employee relationship “is a requirement not only in employees’ money claims against the employer but is, likewise, a condition where the claimant is the employer.”

The present controversy is rooted in Rocio’s resignation within the 24-month period in violation of the “Minimum Employment Length” clause of her employment contract. Thus, the Court held that Comscentre’s claim for payment is inseparably intertwined with the parties’ employer-employee relationship. For it was Rocio’s act of prematurely severing her employment with Comscentre that gave rise to the latter’s cause of action for payment of the “employment bond.”

Comscentre’s claim was “an offshoot of the resignation of Rocio and the complications arising therefrom and which eventually led to the filing of the case before the Labor Arbiter.” As such, its claim fell within the original and exclusive jurisdiction of the labor tribunals.

For more of Dean Nilo Divina’s legal tidbits, please visit www.divinalaw.com. For comments and questions, please send an email to cad@divinalaw.com.